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Upscale dairies grow in India, promising safer milk

Joao Figueiredo | Moment | Getty Images

On a 26-acre farm a couple hours' drive inland from Mumbai, hundreds of black-and-white Holstein-Friesian cows laze around, dining on seasonal greens and listening to a custom playlist of rap, pop, classical and even devotional music. They are treated to a routine medical checkup before heading to a "rotary milking parlor," where their udders are gently squeezed, until the cows step away, at will.

Within a day, the milk — never touched by human hands — is bottled and whisked away to hotels, restaurants and homes in nearby cities.

The dairy, Pride of Cows, is one of the largest players in the growing business of farm-to-table milk, part of India's new crop of organic, fair-trade and artisanal food products. While cows have long been revered in India, the country's dairy industry has only recently started buying into the belief that happier heifers breed healthier milk — and potentially bigger profit.

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Devendra Shah, the chairman of Pride of Cows' parent company, Parag Milk Foods, regularly uses the word "love" to describe his operation, referring to his cows as "pampered and cherished."

This new marketing approach targets an increasingly health-conscious and brand-savvy Indian consumer, a growing niche within an already swelling middle class that has the means to afford costlier products. But the appeal of this milk is as much about food safety, after a milk adulteration scandal shocked the nation.

The Food Safety and Standards Authority of India found in 2012 that nearly 70 percent of the milk samples it tested nationwide did not meet food safety standards. A majority of samples were diluted with water or contained impurities like urea, liquid formaldehyde and detergent solution.

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In a country where dairy is considered a fundamental life force, let alone most people's main source of animal protein, the revelations struck many as surreptitious sacrilege. This past January, India's Supreme Court strongly suggested that states around the country join Odisha, Uttar Pradesh and West Bengal in amending their penal codes to punish milk adulteration with possible life sentences.

Indian entrepreneurs have responded to regular milk's troubled reputation by leasing farms and opening dairies that pledge fresh, 100 percent pure milk.

Nikhil Vora, a former managing director at a market analysis firm in Mumbai, said that the so-called farm-to-home market accounted for less than 1 percent of the $70 billion market for milk, cheese, yogurt and other dairy products. But the segment is forecast to increase by more than 20 percent a year.

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Pride of Cows provides 10,000 liters daily to customers through its subscription service in Mumbai and nearby Pune, including five-star hotels and a French crêperie called Suzette. The milk costs about 75 rupees ($1.24) a liter, almost double the rate for pasteurized milk at a neighborhood store.

Pride of Cows reaches customers much the same way a new winery or brewery might. The company regularly attends food exhibitions and invites potential or existing customers to the farm for guided tours. Pride of Cows has also expanded its outreach into schools, mostly private, hosting workshops on nutrition and enrolling 150 students for a planned 45-day internship this summer through which participants "will get hands-on experience in the various aspects of Pride of Cows' business operations," according to a company spokeswoman.

The Parisian who runs Suzette, Jérémie Sabbagh, said he tried Pride of Cows' milk at a food exhibition and was struck by the "huge difference in taste." "We realized at some point that many of our customers were already their customers," he said.

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The appetite for upscale food products in India's metropolitan areas is also reflected in the proliferation of grocery stores like Nature's Basket and Modern Bazaar, whose shelves are filled with imported brands. Ashmeet Kapoor, founder and chief executive of I say Organic, an organic foods subscription service in Delhi, said that his company had grown in particular among "those that have moved back" to India from abroad.

"It's mostly those who've just started a family and want to make sure that they are eating the healthiest possible food," Mr. Kapoor said. "These are well-placed professionals who may be influenced by the organic food movement abroad."

The push into such premium products comes even as the broader economy shows signs of weakness. Chakradhar Gade, a graduate of the Indian Institute of Management who quit his job as a financial analyst, sees the dairy business as recession-proof.

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About a year and a half ago, Mr. Gade and a business partner subcontracted a farm just outside Delhi, with around 50 cows, to form Country Fresh Milk. He went door to door in Delhi's sprawling technology suburb of Gurgaon, and found a receptive consumer base of young professionals, new families and recent arrivals from rural communities who missed the taste of farm-fresh milk and were skeptical of regular milk's purity.

Most milk adulteration occurs at the small-scale farms that supply most major milk companies. By adding water, farmers can increase the volume they are able to sell, while other additives increase the fat content and thus the value of the milk.

Mr. Gade spends 5 percent of his revenue on quality control. An independent lab tests his milk weekly as it leaves his farm, checking for water, fat and 24 other adulterants.

Despite the extra costs, the company is charging the going rate for regular milk, and Mr. Gade said many customers immediately wanted to make the switch. He plans to keep his prices low until he has a more solid customer base.

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After adding four more farms, Country Fresh Milk now delivers milk, cheese and clarified butter to 1,000 customers in Gurgaon. He said his goal was to eventually supply 4 percent of Gurgaon's daily milk consumption, which he estimates is around 500,000 liters a day.

Sanjay Sharma, the founder of Mothers Nature Foods, also in Gurgaon, said he saw pure milk as a moral imperative as well as a business opportunity.

"My guru, Avdhoot Shivanand Baba, advised me to start this business," Mr. Sharma said, referring to his spiritual adviser. "He explained the concept of 'life force energy' to me, wherein the fresher the food, the greater the energy that one can derive from it."

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Formerly a flight instructor in California and Europe, Mr. Sharma bought two cows because he missed the quality of milk he was able to get abroad. Three years later, his company has over 500 cows on two farms, and 2,000 customers.

At Mr. Sharma's new farm in Alwar, Rajasthan, he operates a "spa for cows," where he is landscaping waterfalls into the pasture to replicate a "village atmosphere" that he says cows are used to. "I thought if I can make my cows healthy and happy," Mr. Sharma said, "then I'll also get even more good hormones in the milk."

"Big Milk is slow poison," he said, referring to India's dominant dairy producers. "See how we only get one or two medals in the Olympics? People aren't even growing properly here anymore."

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